AUD/USD Forecast: Mildly bearish ahead of RBA’s decision

Valeria Bednarik FXStreet

AUD/USD Current Price: 0.7631

The RBA is expected to maintain its monetary policy unchanged.
Services output in Australia improved by more than expected in January.
AUD/USD is technically poised to extend its decline, but RBA expected to be hawkish.

The AUD/USD pair fell to an intraday low of 0.7605, but is finishing the day little changed in the 0.7630 area. The aussie fell at the opening as a hotel guard who sparked a 5-day lockdown in the Perth area was confirmed to have the UK coronavirus strain. Australia has been quite fast to respond to single contagions, but a paralyzed region always spurs concerns.

Australian data was upbeat as the January Commonwealth Bank Manufacturing PMI was confirmed at 57.2 while the AIG Performance of Manufacturing Index for the same month came in at 55.3 from 52.1 in the previous month. TD Securities Inflation resulted at 1.5% YoY, matching the previous reading. This Tuesday, the focus will be on the Reserve Bank of Australia. The central bank is widely anticipated to keep its monetary policy unchanged, and probably review its economic outlook to the upside.

AUD/USD short-term technical outlook

The AUD/USD pair is at risk of falling further, but the RBA has little chances of being a bearish catalyst. In the 4-hour chart, a bearish 20 SMA caps the upside, heading lower below the larger ones. The Momentum indicator turned south within neutral levels, while the RSI consolidates around 42. A steeper decline is to be expected on a break below 0.7590, the low from last week.

Support levels: 0.7625 0.7590 0.7550

Resistance levels: 0.7685 0.7720 0.7770

View Live Chart for the AUD/USD

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Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

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